Many IT organizations have implemented IT Infrastructure Library (ITIL) IT Service Management (ITSM) Solutions and process improvements to streamline their operations. But, few have monetized improvements to demonstrate business gains. Without such quantification, further investment in ITSM-based improvements are nearly impossible to get executive approval.
No business executive will continue to invest in solutions without clearly defined business relevant financial benefits — especially in today’s economic environment. As a result, we have noticed many organizations are going with the least expensive SaaS-based ITSM solution available.
To turn an existing or new ITSM solution purchase into a cost-cutting machine requires the integration of modern IT Financial Management (ITFM) and IT Service Costing methods and tools as a critical part of the ITSM initiative.
Establishing the cost of IT services and the demand for these services by strategic business units (SBUs) is essential for greater control of IT expenditures. At the same time it enables greater cost transparency and the ability to right-size how assets and resources are deployed. Why? To ensure that underused services are properly supported when compared to business critical and overused services.
Our customer survey of over 200 IT organizations reveals that a number of these organizations have implemented an ITSM improvements centered around Incident, Problem and Change Management processes. This research also reveals that IT organizations that have implemented modern ITFM and IT Service Costing methods and tools for showback or chargeback purposes have seen:
- 20% reduction in annual IT expenses,
- 10% redeployment of staff resources away from underused IT Services,
- 15% reduction in overall use of IT Services by SBUs, and
- 12% increase in customer satisfaction ratings, and a higher perceived value of the IT organization.
The customers who have only implemented Incident, Problem and Change Management ITSM improvements without integrating a modern ITFM and IT Service Costing method and tool have seen three significant consequences:
- No change in the perceived value of the IT organization to the business.
- Increases in the demand for premium IT Services, resulting in increased IT expenses.
- Continued perception that internal IT costs are greater than competitive services commercially available.
The reason for these consequences is that for IT organizations without modern ITFM and IT Service Costing methods and tools, it is nearly impossible (ie., too labor intensive) for them to collect monetized measurements that the executives want see and understand. On the other hand, integration of modern ITFM disciplines and IT Service Costing methods and tools, the monetized information necessary for executive approval is at your finger-tips.
The staff at KEDARit believe that every ITIL-ITSM implementation initiative requires a modern ITFM and IT Service Costing solution in order to deliver hard IT facts about the business benefits of IT expenditures. To learn more, take a look at these modern ITFM and IT Service Costing offerings.
- Service Utilization Manager (SUM™) — to design your IT Services that set up the foundation for IT Service Costing.
- Cost Optimization Service (COP-S™) “Snapshot” offering — to quickly get a baseline of your IT services cost.
Each of these offerings quickly and easily takes you through the steps to turning your ITSM solution into a cost-cutting machine.Tags:Cost Optimization, IT Showback, ITSM, Service Catalog, Service Costing, Showback